Final answer:
An auditor aware of unusually large accounts receivable might stratify the sample by dollar amount, increase sample size to reduce sampling error or require more confidence in the results. Stratification and increasing sample size can lead to a more accurate and reliable audit outcome. Option b.
Step-by-step explanation:
When an auditor is planning a sample for accounts receivable confirmation and is aware of several unusually large accounts, one approach they would most likely take is to stratify the population (B) by dollar amount. This means dividing the accounts receivable into different levels or layers based on their value. By doing so, the auditor can ensure that there is a representative sample of both large and small accounts, which provides a more accurate reflection of the population as a whole.
Another action the auditor could take is to increase the sample size. A larger sample can reduce the effect of the unusually large items on the overall audit conclusions. This strategy would help reduce sampling error and would result in a more reliable audit outcome. However, increasing the sample size may involve additional cost and time.
Lastly, the auditor might decide to require more confidence (less detection risk). If the auditor wants to maintain the same error bound but increase the level of confidence, the sample size would generally need to be increased. On the other hand, if the firm opts to maintain the current sample size but still desires an increased level of confidence, a higher error bound would usually be accepted.